STOVALL: Here's What Happens Next In A Bull Market

This is the debate among the chartists who hate rounding
numbers. From Sam Stovall's Sector Watch:

Was it back on March 9, 2009, after the S&P 500 endured a
17-month decline of 57%? If so, we are coming up on the third
anniversary of this bull market move. However, some are beginning
to question if the NEW bull market actually began on October 3,
2011. Granted, the "500" did not decline by 20% or more on a
closing basis, the traditional measure of a bear market.
Indeed,
the S&P 500 fell 19.4% on a closing basis from April 29, 2011
through October 3.

But there's more:

However, those arguing to call it a new bull market aren't giving
up that easily. They remind us that the "500" did decline more
than 20% on an intra-day basis.

So, we're either in the beginning of the first year of a bull
market or the end of the third year of the bull market. Take your
pick.

For those who care about history, Stovall provides a ton of
information on what happened in the first and fourth years of
bull markets.

First Year:

Following the conclusion of all 12 recognized bear markets since
World War II, the first year average return of
38% was similar to the near-30% average advance
following severe corrections. Individual performances for
first-year bulls were consistently in the double-digits, with
gains ranging from 21% in 1947-48 and 1987-88 to advances of 58%
in 1982-83 and 68% in 2009-10. Also, during the first 12 months
of the seven new bull markets since 1970, the market was led by
such cyclical sectors as Consumer Discretionary, Financials,
Industrials, Information Technology, and Materials. However, the
Consumer Staples,
Telecom Services and Utilities groups, while benefiting from a
rising tide that lifted all boats, still lagged the cyclical
sectors and the overall market.

Fourth Year:

During the fourth years of surviving bull markets since 1945
(there were six out of the original 11), however, the S&P 500
rose an average of 12.5%, recording individual
returns ranging from a decline of 2.3% in 1952-53, to a near 30%
advance in 1985-86. However, the bull market that started in 1962
did not survive to celebrate its fourth anniversary, as it joined
the below-average duration bull markets of 1947, 1966, 1970, and
1987. And while consistent double-digit price gains characterized
first-year bull market performances, a wider array of results, as
well as a lower average advance (from a smaller set of
observations), were more consistent in fourth-year bull markets.
In addition, while the cyclical sectors led first-year bull
markets, the best performing sectors during the fourth year were
predominantly defensive in nature: Consumer Staples, Health Care,
Materials and Telecom Services.